Iran Gasoline Consumption Falls 13% After Government Price Rise

By Ladane Nasseri -
Jan 9, 2011

Iran’s average daily demand for
gasoline has fallen by 13 percent, three weeks after the
government quadrupled the price of subsidized fuel, the Oil
Ministry reported.

Daily gasoline consumption last week averaged 55.4 million
liters (14.6 million gallons), compared with 63.9 million liters
the day before the Dec. 19 price increase, the ministry’s
official news website Shana reported.

Iranians now pay 4,000 rials (40 cents) a liter for 50
liters a month and 7,000 rials a liter for larger volumes. They
previously paid a subsidized price of 1,000 rials a liter for a
monthly maximum of 60 liters.

Under a five-year plan started on Dec. 19 and promoted as
an “economic revolution” by President Mahmoud Ahmadinejad,
Iran began slashing three-decades-old subsidies and replacing
them with cash payments to the poorest.

Iran, the second-largest oil producer in the Organization
of Petroleum Exporting Countries, is “one of the most
wasteful” countries in terms of energy consumption, the International Monetary Fund has said. The Iranian Central Bank
has estimated that energy subsidies alone cost the government
$40 billion to $100 billion a year, depending on oil prices.

In five years, gasoline is to be sold domestically for 90
percent of the price found elsewhere in the region, according to
the legislation.